TO:Proximity Video Team
FROM:Bryan Roulette
DATE:February 24, 2010
SUBJECT:YouTube's strategy report
Below is a strategy report for the leader of the online video streaming world YouTube. This memo will discuss the past, present and future of the company. It will also cover aspects of the company such as YouTube's profile, competitive landscape, market strategy as well as the Gen-Y implications resulting from this information.
Profile YouTube is the premeire video sharing website on which users can upload and share videos. Three former PayPal employees created YouTube in February 2005. In November 2006, YouTube, LLC was bought by Google Inc. for $1.65 billion, and is now operated as a subsidiary of Google. Google is a global technology company whose stated mission is to organize the world's information and make it universally accessible and useful. With about 70 million unique visitors a month in the US (and the sixth largest audience on the Web), it has become the clear leader in online video sharing. YouTube earns revenue by selling advertising, and has partnership deals with content providers such as CBS, Warner Music Group, and the NBA (Google Finance 2010). Google has amassed and maintains what we believe is the Internet's largest index of information (consisting of billions of items, including Web pages, images and videos), and makes most of it freely accessible and usable to anyone with online access. Google's websites are a leading Internet destination, and its brand is one of the most recognized in the world. International sources contributed 53% of revenues in the 2009 fourth quarter, versus 50% in the prior-year period(Standard & Poor’s, 2010). Google does not provide detailed figures for YouTube's running costs, and YouTube's revenues in 2007 were noted as "not material" in a regulatory filing. In June 2008 a Forbes magazine article projected the 2008 revenue at US$200 million, noting progress in advertising sales (wikipedia 2010).
Competitive Landscape The online video sharing community is growing rapidly. This creates an increasingly competitive market for YouTube. With all of YouTube’s recent success, new companies such as yahoo video, flickr, and hulu are trying to compete with the google powerhouse for a spot in the online video sharing market. Also YouTube’s partnership program gives them a clear advantage over the competition. YouTube still owns and dominates the whole market for user generated video however their landscape is changing as the company branches out into different aspects of the online world.
YouTube’s Strategy The company has amassed a collection of more than 100 million video clips, many of which feature user generated content, which it broadcasts online via its Web site at YouTube.com. YouTube is based in San Bruno, California, and uses Adobe Flash Video technology to display a wide variety of content, including movie clips, TV clips, and music videos, as well as amateur content such as video blogging and short original videos. Most of the content on YouTube has been uploaded by individuals, although media corporations including CBS, the BBC, UMG and other organizations offer some of their material via the site, as part of the YouTube partnership program (wikipedia 2009).
Gen-Y Implications One of the biggest questions facing YouTube’s future is how will they stay ahead of the growing competitors such as Hulu. Google however has very high hopes and expects YouTube to become more profitable than ever. YouTube is experimenting with ways and technologies to make the site better such as refining search and discovery tools. With a large portion of it’s viewers being younger, it will be interesting to see if its popularity continues to grow, or if many will switch to newer video sites.
TO:Proximity Video Team
FROM:Bryan Roulette
DATE:February 24, 2010
SUBJECT:YouTube's strategy report
Below is a strategy report for the leader of the online video streaming world YouTube. This memo will discuss the past, present and future of the company. It will also cover aspects of the company such as YouTube's profile, competitive landscape, market strategy as well as the Gen-Y implications resulting from this information.
Profile
YouTube is the premeire video sharing website on which users can upload and share videos. Three former PayPal employees created YouTube in February 2005. In November 2006, YouTube, LLC was bought by Google Inc. for $1.65 billion, and is now operated as a subsidiary of Google. Google is a global technology company whose stated mission is to organize the world's information and make it universally accessible and useful. With about 70 million unique visitors a month in the US (and the sixth largest audience on the Web), it has become the clear leader in online video sharing. YouTube earns revenue by selling advertising, and has partnership deals with content providers such as CBS, Warner Music Group, and the NBA (Google Finance 2010). Google has amassed and maintains what we believe is the Internet's largest index of information (consisting of billions of items, including Web pages, images and videos), and makes most of it freely accessible and usable to anyone with online access. Google's websites are a leading Internet destination, and its brand is one of the most recognized in the world. International sources contributed 53% of revenues in the 2009 fourth quarter, versus 50% in the prior-year period(Standard & Poor’s, 2010). Google does not provide detailed figures for YouTube's running costs, and YouTube's revenues in 2007 were noted as "not material" in a regulatory filing. In June 2008 a Forbes magazine article projected the 2008 revenue at US$200 million, noting progress in advertising sales (wikipedia 2010).
Competitive Landscape
The online video sharing community is growing rapidly. This creates an increasingly competitive market for YouTube. With all of YouTube’s recent success, new companies such as yahoo video, flickr, and hulu are trying to compete with the google powerhouse for a spot in the online video sharing market. Also YouTube’s partnership program gives them a clear advantage over the competition. YouTube still owns and dominates the whole market for user generated video however their landscape is changing as the company branches out into different aspects of the online world.
YouTube’s Strategy
The company has amassed a collection of more than 100 million video clips, many of which feature user generated content, which it broadcasts online via its Web site at YouTube.com. YouTube is based in San Bruno, California, and uses Adobe Flash Video technology to display a wide variety of content, including movie clips, TV clips, and music videos, as well as amateur content such as video blogging and short original videos. Most of the content on YouTube has been uploaded by individuals, although media corporations including CBS, the BBC, UMG and other organizations offer some of their material via the site, as part of the YouTube partnership program (wikipedia 2009).
Gen-Y Implications
One of the biggest questions facing YouTube’s future is how will they stay ahead of the growing competitors such as Hulu. Google however has very high hopes and expects YouTube to become more profitable than ever. YouTube is experimenting with ways and technologies to make the site better such as refining search and discovery tools. With a large portion of it’s viewers being younger, it will be interesting to see if its popularity continues to grow, or if many will switch to newer video sites.
References
Sullivan, Laurie. (February 28, 2010). YouTube Refining Search and Discovery Tools. Retrieved March 1, 2010 from http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=123286
Standard & Poor’s. (2010). Google Profile. Retrieved February 28, 2010 from http://www.netadvantage.standardandpoors.com.proxy-tu.researchport.umd.edu/NASApp/NetAdvantage/simpleSearchRun.do?ControlName=HomePageSearch
Hardy, Quentin; Evan Hessel (May 22, 2008). "GooTube". //Forbes Magazine// (Forbes.com). Retrieved February 28, 2010 from http://en.wikipedia.org/wiki/YouTube#Company_history